Patriots Stadium Deal Is In Trouble

Insurer, Utility Clash Over Relocation Costs As The Deadline Nears

Efforts to clear a downtown Hartford site for the New England Patriots appeared to be in serious trouble Tuesday after a tense meeting between Gov. John G. Rowland and the top executive of CTG Resources Inc., the company in the path of a stadium.

CTG is at loggerheads with Phoenix Home Life Mutual Insurance Co. and other backers of the Adriaen's Landing project on the relocation costs for the corporate headquarters of CTG's Connecticut Natural Gas Corp.

CTG wants $48.8 million for the gas company move; Phoenix and other Hartford corporations and banks that have been asked to help pay the freight for the move say the price tag is far too high. They say the CNG relocation should cost only $25 million. Meanwhile, progress on moving CTG's steam plant has been stalled over demands by the utility that its potential partners say are too costly.

The impasse, detailed in a March 9 letter to CTG chief executive officer Arthur C. Marquardt from Rowland's representative in the talks, reflects demands from CTG that its potential partners view as deal- breakers. One of those is that the quasi-public Connecticut Resources Recovery Authority -- CTG's potential partner in a relocated steam plant -- assume all financial liability for environmental clean-up costs at the existing site.

Meanwhile, less than three weeks remain before an April 2 deadline. If the state fails to provide the Patriots with a preliminary plan for clearing the stadium site, the team can walk away from the deal, at considerable political embarrassment to Rowland.

The resources recovery authority, working in partnership with international power plant-builder ABB Asea Brown Boveri, has formally offered to build a replacement steam and chilled-water plant attached to the authority's trash-burning plant in the city's South Meadows.

Rowland, who personally wooed Patriots owner Robert K. Kraft to Hartford and has appeared on national television extolling the stadium plan, is growing intensely frustrated with Marquardt, say those knowledgeable about the negotiations.

The talks on the steam plant and CNG's relocation were declared ``deadlocked'' last week by Rowland's representative, Richard D. Gray, in his letter to Marquardt.

Despite the problems, one result of Tuesday's meeting in the Capitol between Rowland and Marquardtis that talks will resume today.

``The purpose of today's meeting between Gov. Rowland and Art Marquardt is to continue to explore avenues to find a solution to moving the steam plant,'' said Dean Pagani, Rowland's press secretary. ``Those efforts continue, and Rich Gray is involved in those continuing efforts, at the governor's direction.''

Gray's letter said CTG's proposed changes to an earlier ``memorandum of understanding'' with the trash authority were unacceptable -- so much so that the authority's president, Robert E. Wright, would recommend the agreement be rejected when his board meets this Thursday.

At issue:

* CTG's refusal to a guaranty of a minimum purchase of steam, while requiring the authority to provide a letter of credit to make sure it delivered the steam as promised.

* CTG wants total control of design specifications, while the authority would assume both the financial risk for cost overruns and construction risk for time delays.

* CTG wants, from the authority, to be reimbursed for its staff time and overhead retroactive to Jan. 1 and for the balance of the project.

* CTG wants the authority to be responsible for any increase in property taxes on the replacement steam plant.

* CTG wants the authority to be responsible for any environmental clean-up costs on both the present steam plant site and the replacement site.

In addition, Gray said, rising interest rates had broadened the gap between what the authority could raise through revenue bonds, and the estimated $47.7 million cost of the replacement plant.

``The gap, when added to the costs associated with the conditions in the [memorandum of understanding] make this transaction financially impossible for CRRA to execute,'' Gray's letter said.

The question in the minds of many with inside knowledge of the talks is whether Marquardt and other CTG executives truly want to make a deal. Marquardt and other CTG executives have said repeatedly they want to move, so long as there is no cost to shareholders and ratepayers.

``We're trying to make this happen. We will continue to try to make this happen. But we're not going to comment about any elements of the discussion at this point,'' Marquardt said when reached at home Tuesday evening.

Marquardt declined to comment on whether the company was close to resolving the issues blocking the relocation of the steam plant.

``I am still very hopeful we can reach resolution,'' he said.

The resources recovery authority remains interested in the joint venture to built with ABB a replacement steam and chilled water plant, which would also generate electricity, in the South Meadows.